EX-99.1 2 d405372dex991.htm INVESTOR PRESENTATION SLIDES.

Patterson-UTI Energy, Inc. Patterson-UTI Energy, Inc. Barclays CEO Energy-Power Conference Barclays CEO Energy-Power Conference September 4, 2012 September 4, 2012 Exhibit 99.1

2 2 Forward Looking Statements This material and any oral statements made in connection with this material This material and any oral statements made in connection with this material include "forward-looking statements" within the meaning of the Securities Act of include "forward-looking statements" within the meaning of the Securities Act of 1933 and the Securities Exchange Act of 1934. Statements made which provide 1933 and the Securities Exchange Act of 1934. Statements made which provide the Company’s or management’s intentions, beliefs, expectations or predictions for the Company’s or management’s intentions, beliefs, expectations or predictions for the future are forward-looking statements and are inherently uncertain. The the future are forward-looking statements and are inherently uncertain. The opinions, forecasts, projections or other statements other than statements of opinions, forecasts, projections or other statements other than statements of historical fact, including, without limitation, plans and objectives of management of historical fact, including, without limitation, plans and objectives of management of the Company are forward-looking statements. It is important to note that actual the Company are forward-looking statements. It is important to note that actual results could differ materially from those discussed in such forward-looking results could differ materially from those discussed in such forward-looking statements. Important factors that could cause actual results to differ materially statements. Important factors that could cause actual results to differ materially include the risk factors and other cautionary statements contained from time to include the risk factors and other cautionary statements contained from time to time in the Company’s SEC filings, which may be obtained by contacting the time in the Company’s SEC filings, which may be obtained by contacting the Company Company or or the the SEC. SEC. These These filings filings are are also also available available through through the the Company’s Company’s web web site at http://www.patenergy.com site at http://www.patenergy.com or through the SEC’s Electronic Data Gathering or through the SEC’s Electronic Data Gathering and and Analysis Analysis Retrieval Retrieval System System (EDGAR) (EDGAR) at at http://www.sec.gov. http://www.sec.gov. We We undertake undertake no no obligation to publicly update or revise any forward-looking statement. Statements obligation to publicly update or revise any forward-looking statement. Statements made in this presentation include non-GAAP financial measures. The required made in this presentation include non-GAAP financial measures. The required reconciliation to GAAP financial measures are included on our website and at the reconciliation to GAAP financial measures are included on our website and at the end of this presentation. end of this presentation.

3 Why Invest now in U.S. Oil Services? • • Shale gas and oil fundamentally changed the North American Shale gas and oil fundamentally changed the North American production outlook for natural gas and oil production outlook for natural gas and oil – – Horizontal drilling and completion techniques Horizontal drilling and completion techniques • • Major new investments over the past five years in North Major new investments over the past five years in North American land projects by many of the largest U.S. and American land projects by many of the largest U.S. and International Oil Companies International Oil Companies – – Major opportunities to produce hydrocarbons at attractive Major opportunities to produce hydrocarbons at attractive world market prices world market prices – – Increased issues in other politically-challenged areas Increased issues in other politically-challenged areas – – Return to North America land; a major shift! Return to North America land; a major shift! • • U.S. now expected to supply approximately 60% of domestic U.S. now expected to supply approximately 60% of domestic petroleum consumption; was 40% six years ago. petroleum consumption; was 40% six years ago.

4 Why Invest now in U.S. Oil Services? • • The timing looks good: The timing looks good: – – Attractive oil prices have kept oil directed activity high Attractive oil prices have kept oil directed activity high •Increased oil activity has largely absorbed the spare •Increased oil activity has largely absorbed the spare capacity from the more than 50% decrease in natural capacity from the more than 50% decrease in natural gas drilling gas drilling – – Natural gas market looks poised for a “modest” Natural gas market looks poised for a “modest” recovery recovery •Inventories filling slower than previously expected with •Inventories filling slower than previously expected with weekly injections averaging approximately 65% of prior weekly injections averaging approximately 65% of prior year levels year levels •U.S. natural gas rig count at the lowest level in more than •U.S. natural gas rig count at the lowest level in more than 13 years 13 years •Increased planned industrial usage •Increased planned industrial usage

Key Takeaways – PTEN Advantages • • Operational Strength Operational Strength – – High quality equipment High quality equipment – – Term contract backlog / customer relationships Term contract backlog / customer relationships – – Strong operational and financial flexibility Strong operational and financial flexibility • • Flexible operating model Flexible operating model – – Maximizes earnings growth during periods of increased Maximizes earnings growth during periods of increased activity activity – – Minimizes costs during periods of low activity Minimizes costs during periods of low activity – – Strong cash flow generation Strong cash flow generation • • History of returning capital to shareholders History of returning capital to shareholders – – Share buybacks Share buybacks – – Dividends Dividends 5

Contract Drilling • One of the “Big 3” U.S. Land drillers • High quality fleet including 100 APEX™ rigs • Strong term contract coverage Who We Are >> Operational Strength >> Financial Flexibility Patterson-UTI reported results for the six months ended June 30, 2012 6 Components of Revenue Pressure Pumping 31% Contract Drilling 67% Oil & Natural Gas 2%

Pressure Pumping • Industry expertise needed for sophisticated customers and substantial local knowledge • High quality fleet of modern pressure pumping equipment • Strong reputation for safe and efficient operations Who We Are >> Operational Strength >> Financial Flexibility Patterson-UTI reported results for the six months ended June 30, 2012 7 Components of Revenue Pressure Pumping 31% Contract Drilling 67% Oil & Natural Gas 2%

Operational Strength – Operational Strength – Contract Drilling Contract Drilling

9 PTEN’s Active U.S. Land Drilling Rigs as of August 2012 Large Geographic Footprint Who We Are >> Operational Strength >> Financial Flexibility Appalachia & Midwest Rockies 28 Rigs 23 Rigs 44 Rigs 14 Rigs 11 Rigs 52 Rigs Mid-Continent North Texas East Texas South Texas 36 Rigs Permian Basin

10 PTEN’s Active Rigs in Unconventional Areas as of August 2012 18 Rigs 2 Rigs 7 Rigs 9 Rigs 30 Rigs 6 Rigs 6 Rigs Active in Unconventional Plays Who We Are >> Operational Strength >> Financial Flexibility 1 Rig 3 Rigs Bakken Pinedale Piceance Barnett Eagle Ford Niobrara Woodford Utica Haynesville Marcellus 21 Rigs

11 • 1000 HP drawworks • Small footprint, big rig capability • Fast move & rig-up • Walking system is an optional feature APEX 1000™ • 1500 HP drawworks • Great all purpose rig • Fast move & rig-up • Ideal for Eagle Ford, Barnett, and Haynesville APEX 1500™ • Able to move in all directions • Able to “walk” with mast up and drill pipe/collars in the derrick • A leadership position in this “fit-for-purpose” rig category APEX Walking™ Innovative Rig Designs Who We Are >> Operational Strength >> Financial Flexibility

12 New APEX™ Rigs Have Significantly Increased Fleet Quality. 115 24 new APEX™ 24 new APEX™ rigs expected to be added in 2012 rigs expected to be added in 2012 Increasing Fleet Quality Who We Are >> Operational Strength >> Financial Flexibility 0 20 40 60 80 100 120 2008 2009 2010 2011 2012E 27

…and Expected as of December 31, 2012 …and Expected as of December 31, 2012 APEX APEX 1500 TM APEX APEX 1000 TM APEX APEX Walking TM Total New Rigs Total New Rigs Other Electric Rigs Other Electric Rigs Class Class 13 Preferred Rigs as of June 30, 2012 Preferred Rigs as of June 30, 2012 54 54 15 15 46 46 115 115 54 54 12/31/2012 12/31/2012 24 new APEX™ 24 new APEX™ rigs planned in 2012 rigs planned in 2012 ~170 by the end of 2012 ~170 by the end of 2012 42 42 13 13 45 45 100 100 54 54 6/30/2012 6/30/2012 PTEN has approximately 150 of these preferred rigs Who We Are >> Operational Strength >> Financial Flexibility Increasing Fleet Quality

Who We Are >> Operational Strength >> Financial Flexibility Preferred rigs account for more than Preferred rigs account for more than 75% of Contract Drilling EBITDA 75% of Contract Drilling EBITDA Contribution From High Quality Rigs PTEN Contract Drilling EBITDA by Rig Class Six Months Ended June 30, 2012 14

• • Mechanical Rigs Mechanical Rigs – – More than 180 in fleet More than 180 in fleet – – Upgraded Upgraded to to meet meet customers’ customers’ diverse diverse needs needs – – Ideally suited for certain markets and wells Ideally suited for certain markets and wells – – Favorable return profiles given low book values Favorable return profiles given low book values – – Even better returns if drilling activity accelerates Even better returns if drilling activity accelerates Who We Are >> Operational Strength >> Financial Flexibility Mechanical rigs are a low cost option Mechanical rigs are a low cost option Mechanical Rigs 15 • • roughnecks roughnecks and and other other automation automation • • mobility mobility Iron Iron Enhanced Enhanced • • systems systems Improved mud Improved mud

• • Based on term contracts in place* Based on term contracts in place* – – An average of 141 rigs expected under term contract in the An average of 141 rigs expected under term contract in the third quarter third quarter – – An average of 131 rigs expected under term contract during An average of 131 rigs expected under term contract during the second half of 2012 the second half of 2012 • • PTEN expects to continue signing term contracts PTEN expects to continue signing term contracts Who We Are >> Operational Strength >> Financial Flexibility Term Contract Coverage Improving earnings visibility and returns stability Improving earnings visibility and returns stability * Term contracts in place as of July 26, 2012 16 • • Drilling Drilling term term contract contract revenue revenue backlog backlog of of $1.5 $1.5 billion billion

17 PTEN’s U.S. Rig Count Remains Firm Who We Are >> Operational Strength >> Financial Flexibility PTEN’s U.S. Rig Count

Operational Strength – Operational Strength – Pressure Pumping Pressure Pumping

19 Recent Investments in Pressure Pumping… …Have Increased Fleet Size and Quality Who We Are >> Operational Strength >> Financial Flexibility Growing Pressure Pumping Business 65 770 0 200 400 600 800 2006 2007 2008 2009 2010* 2011 2012E Year End Fracturing Horsepower Other Horsepower * Includes acquisition of approximately 210,000 pressure pumping horsepower in October 2010

20 Northeast Region: Fracturing horsepower: 377,650 Other horsepower: 20,270 Frac Crews under contract : 3 Fracturing horsepower: 290,750 Other horsepower: 61,000 Frac Crews under contract: 2 A Significant Player in Growing Markets Approximately 155,000 HP under term contract Who We Are >> Operational Strength >> Financial Flexibility Pressure Pumping Areas of Operation Southwest Region: 43% 57% Fracturing Horsepower

21 PTEN Pressure Pumping Fleet by Age as of December 2011 Who We Are >> Operational Strength >> Financial Flexibility Modern Pressure Pumping Fleet More than two-thirds of fracturing horsepower is less than five years old >10 Years 14% 5 - 10 Years 19% < 5 Years 67%

Financial Flexibility

23 Capital Expenditures and Acquisitions ($ in thousands) Investing in Our Company Who We Are >> Operational Strength >> Financial Flexibility

24 • • History of returning capital to investors History of returning capital to investors – – Stock Buyback Stock Buyback •$70 million during second quarter of 2012 •$70 million during second quarter of 2012 •Increased authorization to $150 million in July 2012 •Increased authorization to $150 million in July 2012 •Total of $671 million repurchased between 2006 and •Total of $671 million repurchased between 2006 and 2012 2012 – – Cash Dividend Cash Dividend •Initiated cash dividend in 2004 •Initiated cash dividend in 2004 •Quarterly dividend currently $0.05 per share •Quarterly dividend currently $0.05 per share • • Returned nearly $1 billion to shareholders since Returned nearly $1 billion to shareholders since 2005 2005 Who We Are >> Operational Strength >> Financial Flexibility Strong Financial Position

• • Total liquidity of approximately $435 million Total liquidity of approximately $435 million – – $75 million of cash at June 30, 2012 $75 million of cash at June 30, 2012 – – $360 million revolver availability at June 30, 2012 $360 million revolver availability at June 30, 2012 • • No principal payments required until 2020 No principal payments required until 2020 – – $300 million Series A notes due October 5, 2020 $300 million Series A notes due October 5, 2020 – – $300 million Series B notes due June 14, 2022 $300 million Series B notes due June 14, 2022 • • $525 million net debt at June 30, 2012 $525 million net debt at June 30, 2012 – – 16.6% Net Debt/Total Capitalization 16.6% Net Debt/Total Capitalization • • No equity sales in last 12 years No equity sales in last 12 years • • Reduced Reduced share share count count by by 5.4 5.4 million million shares shares over over last last five years five years Who We Are >> Operational Strength >> Financial Flexibility Strong Financial Position 25

Strong Financial Returns Growth in Shareholder Equity Growth in Shareholder Equity The Warren Buffett Standard The Warren Buffett Standard 26

Patterson-UTI Energy, Inc. Patterson-UTI Energy, Inc. Barclays CEO Energy-Power Conference Barclays CEO Energy-Power Conference September 4, 2012 September 4, 2012

Non-GAAP Financial Measures 28 Patterson-UTI Energy, Inc. EBITDA Reconciliation (dollars in thousands) 2012 2011 2010 2009 2008 Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA): Net income (loss) $ 189,812 $ 322,413 $ 116,942 $ (38,290) $ 347,069 Income tax expense (benefit) 53,340 187,938 72,856 (17,595) 193,490 Net interest expense (income) 4,872 15,465 11,098 3,767 (923) Depreciation, depletion, amortization and impairment 128,477 437,279 333,493 289,847 275,990 Cumulative effect of change in accounting principle - - - - - Results of discontinued operations: Income tax expense (benefit) - (209) (543) (2,208) 2,389 Net interest expense (income) - - - - 7 Depreciation - - 166 2,287 2,830 Impairment of assets held for sale - - 2,155 1,900 - Impairment of goodwill - - - - 9,964 EBITDA $ 279,227 $ 962,886 $ 536,167 $ 239,708 $ 830,816 Total Revenue $ 681,112 $ 2,565,943 $ 1,462,931 $ 781,946 $ 2,063,880 EBITDA Margin (EBITDA/Total Revenue) 41.00% 37.53% 36.65% 30.66% 40.26%